Coinbase shares fell about 7% in after-hours trading Thursday after the company reported a second quarter in which it gained crypto trading market share and expanded revenue from prediction markets, stablecoins and other services, yet still recorded a $359.5 million net loss as spot-market activity weakened.
The results show Coinbase’s effort to build a business less dependent on Bitcoin spot trading is moving from strategy to measurable revenue. The company said 88% of its net revenue now comes from sources other than Bitcoin spot trading, while subscription and services revenue climbed to $555 million, nearly half of total net revenue.
Revenue for the quarter reached $1.22 billion, according to the earnings release. Trading across the cryptocurrency sector slowed during the period, reducing activity from retail and institutional customers even as Coinbase increased its share of global crypto trading volume.
Coinbase said its global volume share rose to 10.3% in the second quarter, from 9.1% in the first quarter. That marked its third consecutive quarter of market-share gains, suggesting that the company captured a larger portion of available trading activity despite a weaker overall market.
Prediction markets pass $100 million annualized revenue
Prediction market contracts and revenue rose 106% from the previous quarter and exceeded $100 million on an annualized basis, Coinbase said. The unit has become one of the more visible parts of the company’s attempt to extend its platform beyond conventional cryptocurrency buying and selling.
The company introduced binary products late in the quarter. These contracts allow users to take a yes-or-no position on a defined outcome, such as an economic release, political event or sports result. Coinbase said the new products tripled daily trader numbers and quadrupled daily revenue compared with May.
That growth gives Coinbase another transaction-driven business that does not rely directly on whether Bitcoin, Ethereum or other digital assets are rising. Prediction markets can generate activity around scheduled events and short-term information flows, potentially giving the platform more consistent engagement during periods when crypto prices and spot trading volumes are subdued.
Coinbase first outlined its “Everything Exchange” strategy nearly a year ago, aiming to offer prediction markets, tokenized equities and derivatives alongside crypto trading. The second-quarter figures indicate that prediction markets have begun to contribute enough revenue to be separately highlighted in earnings, though they remain small compared with the company’s core businesses.
Stablecoin balances support subscription revenue
USDC was another major contributor to Coinbase’s diversification strategy. Average USDC balances held in Coinbase products reached a record $20 billion during the quarter, representing more than 30% of USDC in circulation, the company said.
Stablecoin balances can support Coinbase’s subscription and services segment through arrangements tied to USDC reserves, as well as payments, transfers and trading activity. The $555 million reported for subscription and services revenue places the segment close to half of the company’s net revenue, reducing the degree to which quarterly results move solely with spot trading fees.
The concentration of USDC held within Coinbase products also illustrates the exchange’s role in the stablecoin’s distribution. USDC’s supply stood near $73 billion in late July, according to the supplied figures, meaning Coinbase’s average platform balances represented a substantial pool of dollar-linked digital liquidity.
A larger stablecoin base gives Coinbase more capacity to connect trading, payments and on-chain financial products within a single account environment. It also places greater weight on the company’s ability to retain those balances when interest rates, stablecoin competition and regulatory requirements change.
Market-share gains did not prevent a quarterly loss
Coinbase reported its 14th consecutive quarter of positive adjusted EBITDA, a non-GAAP measure that excludes certain expenses such as depreciation, amortization, interest and taxes. Yet the company posted a net loss of $359.5 million for the quarter.
The difference between positive adjusted EBITDA and a net loss can matter for shareholders assessing the durability of Coinbase’s earnings. Adjusted EBITDA is often used to assess operating performance, while net income captures a broader set of costs and gains recognized under standard accounting rules.
The earnings release attributed part of the quarter’s operating progress to greater productivity from artificial intelligence tools across engineering teams. Coinbase did not provide a specific dollar figure for savings tied to AI adoption, but the company presented the tools as part of its effort to scale new products while controlling expenses.
The after-hours decline suggests traders focused on the loss and lower revenue environment rather than market-share gains alone. A larger share of a shrinking trading market can improve competitive positioning, but it does not automatically offset the revenue pressure caused by lower overall transaction volumes.
Strategy shifts toward more products and recurring income
Brian Armstrong, Coinbase’s co-founder and chief executive, has argued that software powered by artificial intelligence could eventually handle a larger share of everyday financial transactions. That view fits the company’s push into automated financial tools and blockchain-based products beyond basic brokerage services.
Coinbase’s second-quarter results provide an early test of whether that expansion can cushion the business through quieter crypto markets. Prediction markets are growing rapidly from a small base, while USDC-related balances and subscription revenue offer more recurring income than traditional transaction fees.
The company’s challenge is to turn those newer lines into durable revenue without adding excessive regulatory, operational or market risk. For now, the quarter shows a platform gaining ground in trading while trying to make its earnings less dependent on the next surge in crypto spot volumes.
As Coinbase doubles down on prediction markets and tokenized assets, learn how tokenized equities work and reshape trading.
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